Payroll Auditing for Deland Businesses
At their most basic, payroll best practices include completing a payroll process and understanding where your shortcomings are so you can fix them, moving forward. Both processes sound easy, but you’d be surprised how often people trip up on them.
Payroll is one thing. If you don’t have a proper process in place to guarantee those checks are going out on time, every week, you’ll find yourself in hot water quick! And then there’s auditing.g The process of checking and re-checking your system for issues, inaccuracies, and inefficiency can seem impossible, especially if you aren’t some Deland payroll specialist with all your financial ducks in a row.
Not to worry about that audit, though: we’ve got just payroll auditing guide for you.
Payroll Auditing: The Why
A salary manager who’s on top of the payroll process will typically check the incoming and outgoing salary numbers about once a quarter to make sure everything is as it should be. A well-orchestrated audit can help in the following ways:
* maintaining accuracy
* ensuring compliance
* identifying issues before they develop
* strengthening financial processes
What Does An Effective Payroll Audit Include?
Internal payroll audits need to hit specific notes to be effective, and one of those is consistency. Make this part of your standard business practice, checking off items from our checklist to help you get started.
And remember: every organization has unique needs. Not all payroll audits will look the same. Give some real consideration to your specific needs and how best to serve them.
Verifying Payment Rates
Start simple: employee-by-employee, confirm that the pay rate you have on file for them is the same one on your payroll records. Mistakes can happen, and now is a good time to catch them. Make sure your records are accurate and you are paying what is owed.
Compare Pay With Time and Attendance
For your next trick, check on the overtime, sick days, and holiday time of each employee. If your employees are classified correctly, you’ll have an accurate picture of how much overtime they are eligible for. Check for overtime hours which exceeded the payroll budget and make sure to report it to financial. Pay close attention to detail, during this process.
During this phase, make sure to check that everyone who received a salary actually worked during those pay periods, as well. This is not very common, but there have been examples of larger companies neglecting to tell payroll about a termination in time and former employees hanging around to receive another check.
Verify Independent Contractors and Sellers
In companies where a contingent workforce is part of your operation, you’ll also want to confirm the status of those contracts over the specific pay period for which they were compensated. This is also a great time to evaluate independent contractor relationships, with an eye to making sure they are still properly classified.
Compare Bank Reconciliation With Internal Ledgers
Make sure to compare your bank account with any internal ledgers. You’re looking to validate your reconciliation and make sure all balances are aligned and all checks reflect the amount they issued.
Check Your Tax Statements For That Financial Year
Is your business handing over the correct amount of tax based on your work and employment payouts? Remember, this includes:
* Social Security taxes
* Federal and state unemployment taxes
* Medicine taxes
Reconcile your payroll tax expenses with your payment reports for a clearer picture of your overall financial management. And remember: effective payroll auditing keeps you in control of your spending. It may seem tedious but, if you run your payroll effectively, you probably won’t have much to worry about.
What’s that? You’d rather bring in a professional to help keep your payroll process in line? Well, as luck would have it, Vision HR offers expert payroll administration services, both in Deland and in other cities from Jacksonville to Titusville.
